TNT Iveco

It looks like TNT Express could still be feeling the effects of the loss of a major UK fashion contract last year as it posts yet another drop in its quarterly turnover.

Despite embarking on a performance improvement strategy earlier this year, the express parcel carrier saw quarterly turnover in its European business slip again.  Adjusted turnover fell to €790m (£648m) for the first quarter of this year, down 3.1% on the same period in 2013, which it claimed was mainly down to the ongoing effect of the lost contract and “contract pruning in Italy”.

Despite the dip in turnover, the operator said its Outlook performance improvement programme has so far been a success when the Q1 results were published earlier this week.

It said its operating expenses in Europe were lower than in the same period last year, and it was seeing ‘higher results’ in nearly all regions. Adjusted operating profit in Europe for the quarter increased by a third to €38m, compared to last year when the profit improvement plan was implemented.

With the turnover slip indicating that there is still a long way to go before TNT Express’ finances reach a sustainable level, CEO Tex Gunning said the company was pleased with its improvement in profitability.

“To realise our 2015 ambitions, we target further improvements in our top and bottom line through the roll out of our Outlook strategy. As significant progress has been made in restructuring our businesses, we are now increasingly focusing on growth in our target segments,” he said.

The sale of TNT’s European fashion business is also being finalised, although The Hub is awaiting the TNT Fashion Group UK restructure to occur.